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China economy
ChinaPolitics

‘Everything is unknown’: young Chinese cut spending as economy falters

  • China’s social media influencers share tips on frugal living as willingness to spend drops, with almost 60 per cent of people saying they want to save money
  • Beijing’s zero-Covid policy has taken a heavy toll on consumption, while its crackdown on tech companies hits younger workers

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China’ social media influencers have made frugality trendy by starting a low-cost living challenge in Shanghai, one of the country’s most expensive cities. Photo: Reuters
Reuters
Before the pandemic, Doris Fu imagined a different future for herself and her family: new car, bigger flat, fine dining on weekends and holidays on tropical islands.
Instead, the 39-year-old Shanghai marketing consultant is one of many Chinese in their 20s and 30s cutting spending and saving cash where they can, rattled by China’s coronavirus lockdowns, high youth unemployment and a faltering property market.

“I no longer have manicures, I don’t get my hair done any more. I have gone to China-made for all my cosmetics,” Fu said.

This new frugality, amplified by social media influencers touting low-cost lifestyles and sharing money-saving tips, is a threat to the world’s second-largest economy, which narrowly avoided contraction in the second quarter. Consumer spending accounts for more than half of China’s GDP.
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“We’ve been mapping consumer behaviour here for 16 years and in all of that time this is the most concerned that I’ve seen young consumers,” said Benjamin Cavender, managing director of China Market Research Group (CMR).

China’s zero-Covid policy – including stringent lockdowns, travel restrictions and mass testing – has taken a heavy toll on the country’s economy. The government’s crackdown on big technology companies has also had an outsize effect on the young workforce.
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Unemployment among people aged 16 to 24 stands at almost 19 per cent, after hitting a record 20 per cent in July, according to government data. Some young people have been forced to take pay cuts, for example in the retail and e-commerce sectors, according to two industry surveys. The average salary in 38 major Chinese cities fell 1 per cent in the first three months of this year, data collated by online recruitment firm Zhilian Zhaopin show.

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